A senior Telangana official, who did not want to be named, said the state government has received a detailed representation from Mantri Developers on the issue seeking compensation for loss of its land assets, a committee of bureaucrats is constitutedC R Sukumar&Sobia Khan | ET Bureau | Updated: May 12, 2016, 16:51 IST

HYDERABAD | BENGALURU: Bangaluru-based real estate firm Mantri Developers, which is building one of Hyderabad's largest mixed-use real estate projects at Jubilee Hills checkpost, has contested the Telangana government's bid to retrieve a significant portion of its land for the proposed multi-level skyway project.

“There are multiple options being discussed, including legal,“ said a person having direct knowledge of the development. Apart from moving the courts, seeking to stall Telangana government's proposal, Mantri is learnt to have approached the Telangana government seeking compensation of around Rs 1,000 crore, offering to surrender entire land of around six acres at current value.

A consortium of ICICI Ventures, Nagarjuna Construction Company (NCC) and Maytas Properties had in February 2006 bought the land abutting KBR Park in a fiercely competed global auction for Rs 335 crore. While ICICI Ventures holds 60% of equity in the project -Jubilee Hills Landmark Projects and NCC own 25%, and the balance 15% is now with IL&FS, which took over Maytas Properties.

While Mantri could not be reached for official comment, ICICI Ventures didn't respond to ET's mail.

When contacted, an NCC official said: “The project appears to have suffered yet another setback in the last 10 years with the state government now seeking a considerable portion of the land for its skyway project, making our project unviable.“

A senior Telangana official, who did not want to be named, said the state government has received a detailed representation from Mantri Developers on the issue seeking compensation for loss of its land assets.

“We have appointed a committee of bureaucrats to look into the matter. We are currently examining it from the legal angle and a decision is still pending,“ he told ET.Mantri had in 2011 entered into a 50:50 development agreement with the consortium wherein the developer will own 50% of total built-up area of 9-lakh square feet and the landowners share their part of 50% in terms of their holding structure. The developer is learnt to have incurred an expenditure of around Rs 100 crore so far on the project, comprising a five-star deluxe hotel, service apartments, retail showrooms and branded residential space, involving a total capital outlay of Rs 1,000 crore.

Merchant bankers said the move by the Telangana government causes concerns among the global investors' community over security to their investments in India and raise doubts over the sovereign guarantees of governments while allotting or auctioning lands. Many real estate projects got stuck in Hyderabad due to the Telangana crisis.

Private equity funds that had made investment in 2006-2008 on the city also lost money in the process.

Currently, the Goods and Services Tax (GST) is levied at 12 per cent on payments made for under-construction property or ready-to-move-in flats where completion certificate has not been issued at the time of sale.